Positive signal to Biden
Saudi Arabia wants to increase potential oil production
07/16/2022, 8:14 p.m
There is no concrete commitment, but Saudi Arabia is still sending US President Biden on his way home with a gift. Riyadh is increasing its potential oil production capacity by a million barrels. That could dampen the high prices for petrol and diesel.
In the discussion about a stronger expansion of global oil production, Saudi Arabia wants to increase its possible production capacity by one million barrels per day. The Saudi Crown Prince Mohammed bin Salman announced during a visit by US President Joe Biden to Jeddah that the maximum possible amount should be increased from the current 12 to 13 million barrels.
In addition, the kingdom no longer has the extra capacity to further increase production, he said. However, the crown prince did not make any promises that he would actually produce more oil.
Biden and Crown Prince Mohammed attended a summit of the Gulf Cooperation Council in Jeddah – along with the other oil heavyweights Iraq, Kuwait and the United Arab Emirates. In a joint statement the previous evening, the USA and Saudi Arabia had already spoken of Saudi Arabia’s obligation to work towards “balancing global oil markets”.
The increase in production capacity should be a positive signal to Biden. A few months before the important congressional elections in the USA, this is under pressure due to the sharp increase in gasoline prices. A higher supply would indirectly help to dampen the price of petrol and diesel. Ultimately, however, the Opec+ oil alliance decides on actual oil production volumes.
Saudi Arabia’s production target for August is just over 11 million barrels per day, according to the group. However, the country only reached this level for a few months in 2018 and 2020. According to the Saudi state-owned company Saudi Aramco, it can extract around 12 million barrels of oil from the ground every day.